Autor Cointelegraph By Marcel Pechman

3 reasons why Binance Chain (BNB) rallied 66% since the crypto market crashed

3 reasons why Binance Chain (BNB) rallied 66% since the crypto market crashed

Uverejnil používateľ | aug 25, 2022 |

BNB, the native token of Binance’s BNB Chain , has bounced 66% from its $183 low in mid-June. The move consolidates its position as the third-ranked cryptocurrency (when stablecoin market caps are removed) and reflects a $50 billion market capitalization. BNB has outperformed the broader altcoin market capitalization after a devastating 73% correction that began in November 2021.BNB token at FTX (blue) vs. Total market cap ex-BTC (orange). Source: TradingViewThe above chart displays how this smart contract blockchain network suffered during the recent market collapse and how similar movements happened across the altcoin market. Now that BNB price has reached $300, let’s take a look at how the asset is positioned compared to July 2021 when it traded for the same price.Is BNB’s market cap and valuation justified?Back in July 2021, the altcoin market capitalization stood 21% higher at $740 billion. Bitcoin (BTC) and Ether (ETH) had already established themselves as the market leaders, but the dispute for the third position was far from settled, at least in terms of the total value.Top coins by market cap on July 4, 2021. Source: CoinmarketcapDespite still being the third largest cryptocurrency, BNB’s market cap was $47 billion, while Cardano (ADA) held a $46 billion valuation. Currently, no altcoin remotely matches its dominance and the gap has widened by more than $30 billion.Smart contracts form the foundation of all decentralized applications (DApps), including decentralized finance, gaming, marketplaces, social networks and many other use cases. So what other success metrics are there besides the number of active users using addresses as a proxy?Top DApps active addresses in 30-days, excluding gambling. Source: DappRadarPancakeSwap, BNB Chain’s decentralized exchange, has 1.98 million active addresses. The number is so massive that aggregating the next four competitors is not enough to match it. According to the data, the runner-up to BNB Chain is 1inch Network, which holds 91% fewer users.For those questioning whether BNB Chain is a one-trick pony, the network holds a couple of games that have 83,000 or more active addresses each and 78,450 that use the 1inch Network. Asking whether PancakeSwap really holds that many users is a valid question, but the Ethereum network only holds three DApps surpassing 30,000 active addresses, namely Uniswap, OpeanSea and MetaMask Swap.Smart contract deposits set BNB Chain apart from its competitorsOne might argue that the total value of users’ deposits in smart contracts are critical to determining a network’s success. However, while it is highly valid for finance applications, there’s not much reason for marketplaces, games, collectibles and social networks to hold large deposits.Total Value Locked ranking, USD. Source: DefillamaCurrently, Ethereum is the absolute leader and the DApp hosting the algorithmic-backed DAI stablecoin has $8.25 billion worth of deposits. Still, this is more than justified by Ether’s $208 billion market capitalization, which is over four times higher than BNB with $50 billion.Data shows a consolidated third place for BNB Chain with $5.5 billion in TVL, which is more than double Avalanche (AVAX) and Polygon (MATIC). Binance leads in trading volumesWhen accounting for the BNB’s valuation, especially in comparison to smart contract blockchains, there needs to be a different methodology because the token has additional utility on the Binance exchange. Furthermore, providing discounted trading fees, opportunities at the token sales launchpad and exclusive staking opportunities allow BNB to stand out among its competitors.Related: Coinbase eyes long-term growth of subscription revenue, NFTs still a focusWebsite visitors in the past 90 days. Source: Arcane ResearchData from SimilarWeb shows Binance had 300 million website visitors in 30 days versus 121 million from Coinbase. Consequently, if FTX Token (FTT) holds a $5 billion market cap, BNB should be five times larger solely from Binance’s utility offer.Therefore, when making a valuation comparison with smart contract platforms, analysts should discount nearly half of BNB’s $50 billion market cap for an equivalent metric. BNB token seems fairly priced due to its third place (when stablecoins are removed) in global market capitalization ranking, its leadership in DApps users, third place status in terms of TVL deposits and absolute dominance of exchange volumes.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Čítaj viac
Monthly Ethereum options data suggests $2K will remain an elusive target

Monthly Ethereum options data suggests $2K will remain an elusive target

Uverejnil používateľ | aug 24, 2022 |

Since failing to close above the $2,000 mark, Ether (ETH) price has faced a steep 16.8% correction, but this was not enough to give bears an edge in the August $1.27 billion monthly options expiry.Ether USD price index, 12-hour chart. Source: TradingViewCurrently, there are mixed feelings about the network’s upcoming change to a proof-of-stake (PoS) consensus network and analysts like @DWhitmanBTC believe the potential benefits of PoS do not supersede the absence of a supply cap and multiple changes in the monetary policy over time.uLtRaSoUnD mOnEyIs #Ethereum even money?If so, what’s the supply limit? What’s the monetary policy?How can anyone trust that it won’t be changed?— Dick Whitmanaut ∞/21M (@DWhitmanBTC) August 24, 2022Regardless of the long-term impact, Ether price was positively impacted by the tentative Merge migration date announcement from a July 14 Ethereum developers call. Influencer and technical analyst Crypto Rover said that Ether would “drop so hard on the Merge day,” as a result of traders unwinding their positions.I think #Ethereum will drop so hard on the Merge day. The whole anticipation is getting not bought up on the spot market but on the futures market.Be warned.— Crypto Rover (@rovercrc) August 23, 2022

One thing is for sure, leveraged Ether buyers were not expecting the steep correction on Aug. 18 and data from Coinglass shows the move liquidated $208 million at derivatives exchanges.Bears placed their bets below $1,600The open interest for Ether’s July monthly options expiry is $1.27 billion, but the actual figure will be lower since bears were overly-optimistic after ETH traded below $1,600 between Aug. 20 and 22. Breaking above that resistance surprised bears because only 17% of the put (sell) options for Aug. 26 have been placed above that price level.Ether options aggregate open interest for Aug. 26. Source: CoinglassThe 1.18 call-to-put ratio shows the dominance of the $685 million call (buy) open interest against the $585 million put (sell) options. Nevertheless, as Ether stands near $1,650, most of these bearish bets will become worthless.If Ether’s price remains above $1,600 at 8:00 am UTC on Aug. 26, only $95 million put (sell) options will be available. This difference happens because a right to sell Ether at $1,600 or lower is worthless if Ether trades above that level on expiry.Bulls completely dominate the August expiryBelow are the three most likely scenarios based on the current price action. The number of options contracts available on Aug. 26 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:Between $1,500 and $1,600: 108,200 calls vs. 103,900 puts. The net result is balanced between bulls and bears.Between $1,600 and $1,700: 45,900 calls vs. 90,000 puts. The net result favors the call (bull) instruments by $150 million.Between $1,700 and $1,800: 192,700 calls vs. 26,000 puts. Bulls’ advantage increases to $290 million.This crude estimate considers the put options used in bearish bets and the call options exclusively in neutral-to-bullish trades. Even so, this oversimplification disregards more complex investment strategies.For example, a trader could have sold a put option, effectively gaining positive exposure to Ether above a specific price, but unfortunately, there’s no easy way to estimate this effect.Related: Ethereum Merge in trouble? Developers find bugs ahead of the planned updateBears could avoid a $150 million lossEther bulls need to sustain the price above $1,600 on Aug. 26 to secure a $150 million profit. On the other hand, the bears’ best-case scenario requires a push below $1,600 to balance the scales and call it a draw.Considering the brutal $270 million leverage long (buy) positions liquidated on Aug. 18 and 19, bulls should have less margin to pressure ETH price higher. With that said, bulls are unlikely to have the means to drive ETH above $1,700 ahead of the August monthly options expiry.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Čítaj viac
Here’s why holding $20.8K will be critical in this week’s $1B Bitcoin options expiry

Here’s why holding $20.8K will be critical in this week’s $1B Bitcoin options expiry

Uverejnil používateľ | aug 23, 2022 |

Bitcoin (BTC) experienced a 16.5% correction between Aug. 15 and Aug. 19 as it tested the $20,800 support. While the drop is startling, in reality a $4,050 price difference is relatively insignificant, especially when one accounts for Bitcoin’s 72% annualized volatility.Currently, the S&P 500’s volatility stands at 31%, which is significantly lower, yet the index traded down 9.1% between June 8 and June 13. So, comparatively speaking, the index of major U.S. listed companies faced a more abrupt movement adjusted for the historical risk metric.At the start of this week, crypto investors’ sentiment worsened after weaker conditions in Chinese real estate markets forced the central bank to reduce its five-year loan prime rate on Aug. 21. Moreover, a Goldman Sachs investment bank strategist stated that inflationary pressure would force the U.S. Federal Reserve to further tighten the economy, which negatively impacts the S&P 500.Regardless of the correlation between stocks and Bitcoin, which is currently running at 80/100, investors tend to seek shelter in the U.S. dollar and inflation-protected bonds when they fear a crisis or market crash. This movement is known as a “flight to quality” and tends to add selling pressure on all risk markets, including cryptocurrencies.Despite the bears’ best efforts, Bitcoin has not been able to break below the $20,800 support. This movement explains why the $1 billion Bitcoin monthly options expiry on Aug. 26 could benefit bulls despite the recent 16.5% loss in 5 days.Most bullish bets are above $22,000Bitcoin’s steep correction after failing to break the $25,000 resistance on Aug. 15 surprised bulls because only 12% of the call (buy) options for the monthly expiry have been placed above $22,000. Thus, Bitcoin bears are better positioned even though they placed fewer bets.Bitcoin options aggregate open interest for Aug. 26. Source: CoinGlassA broader view using the 1.25 call-to-put ratio shows more bullish bets because the call (buy) open interest stands at $560 million against the $450 million put (sell) options. Nevertheless, as Bitcoin currently stands below $22,000, most bullish bets will likely become worthless.For instance, if Bitcoin’s price remains below $22,000 at 8:00 am UTC on Aug. 26, only $34 million worth of these put (sell) options will be available. This difference happens because there is no use in the right to sell Bitcoin below $22,000 if it trades above that level on expiry.Bulls could secure a $160 million profitBelow are the four most likely scenarios based on the current price action. The number of options contracts available on Aug. 26 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:Between $20,000 and $21,000: 1,100 calls vs. 8,200 puts. The net result favors bears by $140 million.Between $21,000 and $22,000: 1,600 calls vs. 6,350 puts. The net result favors bears by $100 million.Between $22,000 and $24,000: 5,000 calls vs. 4,700 puts. The net result is balanced between bulls and bears.Between $24,000 and $25,000: 7,700 calls vs. 1,000 puts. The net result favors bulls by $160 million.This crude estimate considers the call options used in bullish bets and the put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.Holding $20,800 is critical, especially after bulls were liquidated in futures marketBitcoin bulls need to push the price above $22,000 on Aug. 26 to balance the scales and avoid a potential $140 million loss. However, Bitcoin bulls had $210 million worth of leverage long futures positions liquidated on Aug. 18, so they are less inclined to push the price higher in the short term.With that said, the most probable scenario for Aug. 26 is the $22,000 to $24,000 range providing a balanced outcome between bulls and bears. If bears show some strength and BTC loses the critical $20,800 support, the $140 million loss in the monthly expiry will be the least of their problems. In addition, the move would invalidate the previous $20,800 low on July 26, effectively breaking a 7-week-long ascending trend.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Čítaj viac
Data shows Bitcoin and altcoins at risk of a 20% drop to new yearly lows

Data shows Bitcoin and altcoins at risk of a 20% drop to new yearly lows

Uverejnil používateľ | aug 22, 2022 |

After the rising wedge formation was broken on Aug. 17, the total crypto market capitalization quickly dropped to $1 trillion and the bulls’ dream of recouping the $1.2 trillion support, last seen on June 10, became even more distant. Total crypto market cap, USD billion. Source: TradingViewThe worsening conditions are not exclusive to crypto markets. The price of WTI oil ceded 3.6% on Aug. 22, down 28% from the $122 peak seen on June 8. The United StatesTreasuries 5-year yield, which bottomed on Aug. 1 at 2.61%, reverted the trend and is now trading at 3.16%. These are all signs that investors are feeling less confident about the central bank’s policies of requesting more money to hold those debt instruments.Recently, Goldman Sachs chief U.S. equity strategist David Kostin stated that the risk-reward for the S&P 500 is skewed to the downside after a 17% rally since mid-June. According to a client note written by Kostin, inflation surprises to the upside would require the U.S. Federal Reserve to tighten the economy more aggressively, negatively impacting valuations.Meanwhile, extended lockdowns supposedly aimed at containing the spread of COVID-19 in China and property debt problems caused the PBOC led the central bank to reduce its five-year loan prime rate to 4.30% from 4.45% on Aug. 21. Curiously, the movement happened a week after the Chinese central bank lowered the interest rates in a surprise move. Crypto investor sentiment is at the edge of ‘neutral-to-bearish’The risk-off attitude brought by surging inflation led investors to expect additional interest rate hikes, which will, in turn, diminish investors’ appetite for growth stocks, commodities and cryptocurrencies. As a result, traders will likely seek shelter in the U.S. dollar and inflation-protected bonds during periods of uncertainty.Crypto Fear & Greed Index. Source: Alternative.meThe Fear and Greed Index hit 27/100 on Aug. 21, the lowest reading in 30 days for this data-driven sentiment gauge. The move confirmed investors’ sentiment was shifting away from a neutral 44/100 reading on Aug. 16 and it reflects the fact that traders are relatively fearful of the crypto market’s short-term price action.Below are the winners and losers from the past seven days as the total crypto capitalization declined 12.6% to $1.04 trillion. While Bitcoin (BTC) presented a 12% decline, a handful of mid-capitalization altcoins dropped 23% or more in the period.Weekly winners and losers among the top-80 coins. Source: NomicsEOS jumped 34.4% after its community turned bullish on the “Mandel” hard fork scheduled for September. The update is expected to completely terminate the relationship with Block.one.Chiliz (CHZ) gained 2.6% after Socios.com invested $100 million for a 25% stake in the Barcelona Football Club’s new digital and entertainment arm.Celsius (CEL) dropped 43.8% after a bankruptcy filing report on Aug. 14 displayed a $2.85 billion funds mismatch.Most tokens performed negatively, but retail demand in China slightly improvedThe OKX Tether (USDT) premium is a good gauge of China-based retail crypto trader demand. It measures the difference between China-based peer-to-peer (P2P) trades and the United States dollar.Excessive buying demand tends to pressure the indicator above fair value at 100%, and during bearish markets, Tether’s market offer is flooded and causes a 4% or higher discount.Tether (USDT) peer-to-peer vs. USD/CNY. Source: OKXOn Aug. 21, the Tether price in Asia-based peer-to-peer markets reached its highest level in two months, currently at a 0.5% discount. However, the index remains under the neutral-to-bearish range, signaling low demand from retail buying. Traders must also analyze futures markets to exclude externalities specific to the Tether instrument. Perpetual contracts, also known as inverse swaps, have an embedded rate usually charged every eight hours. Exchanges use this fee to avoid exchange risk imbalances.A positive funding rate indicates that longs (buyers) demand more leverage. However, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.Accumulated perpetual futures funding rate on Aug. 22. Source: CoinglassPerpetual contracts reflected a neutral sentiment after Bitcoin and Ether held a relatively flat funding rate. The current fees resulted from a balanced situation between leveraged longs and shorts.As for the remaining altcoins, even the 0.40% weekly negative funding rate for Ether Classic (ETC) was not enough to discourage short sellers.A 20% drop to retest yearly lows is likely in the makingAccording to derivatives and trading indicators, investors are moderately worried about a steeper global market correction. The absence of buyers is evident in Tether’s slight discount when priced in Chinese yuan and the near-zero funding rates seen in futures markets.These neutral-to-bearish market indicators are worrisome, given that total crypto capitalization is currently testing the critical $1 trillion support. If the U.S. Federal Reserve effectively continues to tighten the economy to suppress inflation, the odds of crypto retesting yearly lows at $800 billion are high.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Čítaj viac
3 reasons why Bitcoin’s drop to $21K and the market-wide sell-off could be worse than you think

3 reasons why Bitcoin’s drop to $21K and the market-wide sell-off could be worse than you think

Uverejnil používateľ | aug 20, 2022 |

On Friday, August 19, the total crypto market capitalization dropped by 9.1%, but more importantly, the all-important $1 trillion psychological support was tapped. The market’s latest venture below this just three weeks ago, meaning investors were pretty confident that the $780 billion total market-cap low on June 18 was a mere distant memory.Regulatory uncertainty increased on Aug. 17 after the United States House Committee on Energy and Commerce announced that they were “deeply concerned” that proof-of-work mining could increase demand for fossil fuels. As a result, U.S. lawmakers requested the crypto mining companies to provide information on energy consumption and average costs.Typically, sell-offs have a greater impact on cryptocurrencies outside of the top 5 assets by market capitalization, but today’s correction presented losses ranging from 7% to 14% across the board. Bitcoin (BTC) saw a 9.7% loss as it tested $21,260 and Ether (ETH) presented a 10.6% drop at its $1,675 intraday low.Some analysts might suggest that harsh daily corrections like the one seen today is a norm rather than an exception considering the asset’s 67% annualized volatility. Case in point, today’s intraday drop in the total market capitalization exceeded 9% in 19 days over the past 365, but some aggravants are causing this current correction to stand out.The BTC Futures premium vanishedThe fixed-month futures contracts usually trade at a slight premium to regular spot markets because sellers demand more money to withhold settlement for longer. Technically known as “contango,” this situation is not exclusive to crypto assets.In healthy markets, futures should trade at a 4% to 8% annualized premium, which is enough to compensate for the risks plus the cost of capital.Bitcoin 3-month futures’ annualized premium. Source: LaevitasAccording to the OKX and Deribit Bitcoin futures premium, the 9.7% negative swing on BTC caused investors to eliminate any optimism using derivatives instruments. When the indicator flips to the negative area, trading in “backwardation,” it typically means there is much higher demand from leveraged shorts who are betting on further downside.Leverage buyers’ liquidations exceeded $470 millionFutures contracts are a relatively low-cost and easy instrument that allows the use of leverage. The danger of using them lies in liquidation, meaning the investor’s margin deposit becomes insufficient to cover their positions. In these cases, the exchange’s automatic deleveraging mechanism kicks in and sells the crypto used as collateral to reduce the exposure.Aggregate crypto 24-hour liquidations, USD. Source: CoinglassA trader might increase their gains by 10x using leverage, but if the asset drops 9% from their entry point, the position is terminated. The derivatives exchange will proceed to sell the collateral, creating a negative loop known as a cascading liquidation. As depicted above, the Aug. 19 sell-off presented the highest number of buyers being forced into selling since June 12.Margin traders were excessively bullish and destroyedMargin trading allows investors to borrow cryptocurrency to leverage their trading position and potentially increase their returns. As an example, a trader could buy Bitcoin by borrowing Tether (USDT), thus increasing their crypto exposure. On the other hand, borrowing Bitcoin can only be used to short it.Unlike futures contracts, the balance between margin longs and shorts isn’t necessarily matched. When the margin lending ratio is high, it indicates that the market is bullish—the opposite, a low ratio, signals that the market is bearish.OKX USDT/BTC margin lending ratio. Source: OKXCrypto traders are known for being bullish, which is understandable considering the adoption potential and fast-growing use cases like decentralized finance (DeFi) and the perception that certain cryptocurrencies provide protection against USD inflation. A margin lending rate of 17x higher favors stablecoins is not normal and indicates excessive confidence from leverage buyers.These three derivatives metrics show traders were definitely not expecting the entire crypto market to correct as sharply as today, nor for the total market capitalization to retest the $1 trillion support. This renewed loss of confidence might cause bulls to further reduce their leverage positions and possibly trigger new lows in the coming weeks..The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Čítaj viac

Získaj BONUS 8 € v Bitcoinoch

nakup bitcoin z karty

Registrácia Binance

Burza Binance

Aktuálne kurzy